A group of developers within the Ethereum ecosystem, operating independently of the Ethereum Foundation, have announced Ethereum R1 — a layer-2 (L2) scaling solution for the Ethereum network that does not include a native token. According to the announcement, the project relies entirely on donations, does not have venture funding, and does not have any pre-mined token allocations or a governance token. The project's team wrote in a May 1 X post : "General-purpose L2s should be commodities — simple, replaceable, and free from centralized dependencies or risky governance. Ethereum R1 is our answer to that call — the rollup grounded in credible neutrality, decentralization, and censorship resistance." "Most L2s today are acting more like new L1s than an Ethereum scaling solution — private allocations, opaque governance, and centralized control," the developers continued. The announcement points to increasing concerns within the Ethereum community regarding the current direction of many layer-2 scaling solutions, which some view as potentially misaligned with the interests of the base layer Related: Ethereum community members propose new fee structure for the app layer Ethereum's L2-centric approach: unique value proposition or exploitation? Ethereum's Dencun upgrade in March 2024 significantly lowered fees for its layer-2 networks. By September, revenue on the Ethereum base layer collapsed by 99% . As a result, transaction costs on the Ethereum network base layer dropped to a five-year low of roughly $0.16 per transaction in April 2025, due to a lack of demand for block space on the base layer. Ethereum's transaction fees are determined by demand and network traffic — higher demand and network traffic translate into higher fees for the base layer and more revenue. Ethereum’s base layer revenue collapsed in Q1 2025. Source: Token Terminal While critics continue to argue that this provides perverse incentives for layer-2 networks to grow at the expense of the base layer, protocols continue to argue that Ethereum's many layer-2 networks are a feature, not a bug. Anurag Arjun, co-founder of the unified chain abstraction solution Avail, told Cointelegraph that Ethereum's layer-2 approach gives users a virtually unlimited number of high-throughput chains to choose from, as opposed to the singular one-size-fits-all approach employed by monolithic blockchain protocols. Magazine: Ethereum is destroying the competition in the $16.1T TradFi tokenization race
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